Brexit – So now what?

Following last night’s Brexit vote, Richard Stone provides his commentary on the ongoing Brexit debate

Article updated: 14 March 2019 12:00pm Author: Richard Stone

As expected the House of Commons rejected the Prime Minister’s Brexit deal, overwhelmingly and with no prospect of any further tweaks enabling that defeat to be turned around. As Jeremy Corbyn put it, the deal must surely now be considered dead.

So, what next?

The House of Commons will vote today on whether to leave without a deal. The Prime Minister has been forced by the prospect of numerous resignations from the cabinet to enable MPs to have a free vote on that motion. Indeed, it is likely the Prime Minister may herself vote against ‘no deal’ – it would be a logical position as she continues to advocate for her deal.

Voting against the prospect of leaving without a deal does not in itself prevent no deal

The House of Commons cannot guarantee that outcome unless they vote for a deal or vote to revoke Article 50. Voting against a ‘no deal’ requires the Government to seek an extension of Article 50 from the EU but there is no guarantee the EU will grant such an extension. It’s likely the House of Commons will vote to request an extension to Article 50 on Thursday.

Looking at this from the EU perspective, a short extension may be possible but they would rightly ask themselves what such an extension would be for. There is clearly no prospect of a ‘tweaked’ deal getting through Parliament and a short extension would not allow for a wholesale renegotiation – nor is there the appetite within the current Government for such a renegotiation. More than a short extension will take the date of Brexit beyond the European Parliamentary elections. This will distract the EU for many months and will see many of the existing key players such as Jean-Claude Juncker being replaced as terms in office come to an end and a new Parliament is elected.

How long could a longer extension be?

In the absence of a majority within the UK, or any indication of changes which could command this, being achievable in the short term, the EU will therefore likely demand a much longer extension – a year or more. Furthermore that may come with conditions, not least a continuation of our membership and budget contributions on the current terms.

And none of this gets us any closer to a deal….

The Labour Party have proposed a much softer Brexit – i.e. a solution involving continued membership of the customs union (and hence no need for a customs border on the island of Ireland), continued access to the single market and continued adoption of rights protected in EU law. This would be an outcome far removed from what many of those who voted for Brexit feel they voted for. Not least it would likely involve a continuation of the freedom of movement of people in return for access to the single market and membership of the customs union would preclude the UK from negotiating its own trade deals around the world.

The Prime Minister, although originally a Remain supporter, cannot sanction moving in the direction suggested by Jeremy Corbyn as to do so would tear her own party asunder.

Another General Election could be on the horizon

Given the rejection of the one deal on the table – the only deal available and not capable of being reopened according to the EU – a rejection of no deal, and seemingly no majority or ability of the Government to propose any radically different alternative, there has to come a point when the issue is put back to the people.

The possibility of a General Election has been mooted in the media. However, this would solve little. The Prime Minister has already said she would not lead the Conservative Party into another General Election so would they need to elect a new leader first?

A General Election is also likely, if the polls are to be believed, to return a Parliament where the Conservatives are the largest party but are again struggling to command a sustainable majority. More fundamentally though, if there were a General Election, what would the major Parties have as their policies on the key issue of the day – Brexit. How could each of the two main Parties possibly put together a manifesto sufficiently clear for the public and sufficiently broad to keep their Parties together? How do you get an ardent Remain supporter and an ardent Brexiteer to stand on the same agreed platform?

This is a problem that applies equally to Labour and the Conservatives, as we have seen with the creation of the Independent Group of MPs drawn from both main Parties.

Could we have another referendum instead?

This leaves the prospect of a second referendum. While potentially unpalatable, it is difficult to argue against in democratic terms, especially as nearly three years have passed since the original referendum. The original referendum also presented a binary view between Remain and Leave when in reality Leave meant many different things to different people. If we accept the deal agreed by the Prime Minister is the only and best way to leave with a deal, and we accept leaving without a deal is so unpalatable to MPs that it could not be sanctioned then we do now have a binary choice – Revoke Article 50 and Remain in the EU or Leave on the basis of the agreed deal.

To put this question to the British people would enable them to judge whether they still wanted to leave now the terms of departure were known. This does not overcome the shortcomings of the deal itself. Not least the fact the UK would be entering a treaty like almost no other in that we could not leave without the agreement of the other Party (the EU) – arguably a worse condition than membership of the EU where members at least have the right to leave unilaterally should they wish.

To move in favour of a second referendum also gives reason to request an extension to Article 50 from the EU. It respects the EU’s statements that the deal agreed cannot be reopened and is the best available. To hold a referendum would take time to organise. It would also enable the two sides of the argument to put their cases without tearing apart the overarching political party structures – in just the same way as the original referendum had supporters from both main parties on each side and enabled the parties themselves to hold together.

Chaos and insanity

The current position is chaotic. Persisting without a fundamental shift, such as moving over the heads of Parliament directly to the people, will simply cause the current impasse to become more and more bitterly entrenched.

The fundamental problem with Brexit from the start was a lack of vision. There was no sense of a clearly articulated vision of what Brexit meant and how it might be delivered around which those who supported Leave could unite. That vagueness helped Leave win the original referendum but now the issues that it presents are coming home to roost as, although there was a majority in favour of leaving the EU, no one means of doing so can in itself command a majority, particularly in Parliament.

What we are seeing now is exactly the issue that was captured by the Prime Minister in the phrase “Brexit means Brexit” – a truism which did little to add clarity. As the Prime Minister has now found the absence of clarity after two years, and the absence of any leadership or clear vision of how to deliver Brexit and what the UK will look like post Brexit has made trying to unite the many divergent views around a deliverable solution impossible.

In the days ahead, the Prime Minister will need to change tack to break the impasse and doing so without breaking the Conservative Party will be challenging. However, to continue doing the same over and over again expecting Parliament will come round in the end will simply deliver the same outcome and at that point will prove this is indeed the real definition of insanity.

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Richard Stone

Chief Executive

Richard is a qualified chartered accountant who has held several director roles across the financial services sector. His responsibilities include all aspects of oversight, including the group's strategy for growth, and encompass control and management of the group's business.

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